New York City officials say they’ll kick in more money for the popular child care voucher program after a budget showdown with the state left them with few other options.
The city funding boost means thousands of families at risk of losing their vouchers will be able to continue receiving an average of $300 a week to pay for daycare or after school. Most New Yorkers cannot afford the cost of child care and it is one of the reasons driving families to leave the city, a report by the Fiscal Policy Institute found.
“We have averted disaster for this year,” said Councilmember Lincoln Resler, who had been a vocal proponent of more funding for the program.
“We were facing a reality that 60,000 kids were about to lose their child care. We would have seen thousands of child care providers shutter their doors. … It would have been devastating for families.”
The Child Care Assistance Program faced a fiscal funding cliff after it became so popular there wasn't enough money in the budget to cover all the families who needed it. That's because the state made more families eligible based on their earnings and increased reimbursement fees for providers, driving up costs by 20%.
The Administration for Children’s Services, which administers the program for the city, warned another 40,000 families would need vouchers in the coming year due to the reinstatement of work requirements for those receiving cash assistance. The city is required to prioritize vouchers for public assistance families. With limited funding, that would mean other families would get kicked off their vouchers.
While the state has historically funded most of the program, Gov. Kathy Hochul’s budget this year forced the city to significantly up its contributions or risk getting nothing. The governor’s office argued that the city needed to do its part to help keep the program sustainable for families, adding that city funding had remained flat for too long.
The city will have to contribute $328 million, up from $53 million — a sixfold increase.
“The state smartly structured this in a way that gave the city little wiggle room to ensure they would contribute their portion of the funds,” Restler said. “They weren’t going to rely on a hope or a promise from this mayor or next mayor.”
The state also set aside $350 million in additional one-time funding for the city as long as the city agrees to match those dollars. Any dollars the city contributes that exceeds its previous contributions of $53 million will count toward those matching funds.
During a City Council budget hearing Monday, Administration for Children’s Services Commissioner Jess Dannhauser said the city’s goal is to keep families currently receiving a voucher in the program. He said the agency is working with the budget office to iron out the city’s contributions but expected significantly more money to be included in the city’s spending plan.
“Let’s be clear: For the first time, the state has chosen to withhold support specifically from New York City families unless the city agrees to a 518% increase,” City Hall spokesperson Allison Maser said, calling it a “high-cost deductible.” “Access to child care is not only critical for families — it sustains the child care workforce, largely composed of women and small business owners, who help power our city’s economy. That is why the Adams administration is committed to doing whatever it takes to shield our families from the consequences of the state’s financial neglect and to ensure New York City remains the best place to raise a family.”
Earlier this month the city stopped enrolling new families eligible for vouchers because it was running out of funds. It takes 20 days to determine if a family is eligible so no one is on the waitlist yet.
The Administration for Children’s Services said families who already have vouchers and need to recertify to keep them for another year will be able to do so as long as they have children with special needs, are unhoused or are at or below 300% of the federal poverty level. That encompasses about 97% of income-eligible families in the program.
“It’s not the ideal solution but it does address the problem in the short term and ensures that families can continue to receive support,” said Pete Nabozny, policy director for the advocacy group The Children’s Agenda.
This story has been updated with additional information.
